JERSEY-DOMICILED miner Caledonia Mining Corporation has revealed that its Bilboes Gold Project hosts 1,749 million ounces of proven and probable gold reserves, worth more than US$7 billion at the current gold prices.
The project requires US$584 million in development capital.
Additionally, the project contains 532 000 ounces in measured and indicated resources and 984 000 ounces in inferred resources — figures that exclude the 1,749 million ounces of mineable reserves.
At prevailing gold prices, revenue potential based solely on the proven and probable reserves is US$7,21 billion.
Following the release of its latest feasibility study on Bilboes, Caledonia saw a single-day share price rise of 4,84%, lifting its overall market capitalisation to US$544,39 million.
Last month, Caledonia revealed that it is transitioning to make Bilboes Mine its flagship, from Blanket Mine, over the next three years, when it expects to operationalise the project to produce five tonnes of gold annually.
Keep Reading
- Caledonia profits up 16% after record production
- Power crisis pushes Blanket Mine into fresh costs
- Caledonia profits up 16% after record production
- Caledonia splurges US$4m on Zim gold mine
“The project covers 2 731,60 hectares in Matabeleland North province, approximately 80 kilometres north of Bulawayo, Zimbabwe’s second largest city. Caledonia acquired 100% ownership of Bilboes in January 2023 for US$65 million, settled through the issue of approximately 5,1 million Caledonia shares, and the grant of a 1% net smelter royalty to a previous owner,” Caledonia said this week.
“The mineral reserve and mineral resource bases at Bilboes are substantial. Proven and probable mineral reserves total 1,75 Moz (million ounces) of gold contained in 24,1 mt (metric tonnes) of ore at a grade of 2,26 g/t (grammes per tonne). Measured and indicated mineral resources (exclusive of mineral reserves) total 532 000 oz (ounces) of gold contained in 12,1mt of ore at a grade of 1,37 g/t, while inferred mineral resources total 984 000 oz contained in 18,9mt at a grade of 1,62 g/t.”
The miner said there was also significant exploration potential both within Bilboes and on the adjacent Motapa property, a brownfield site comprising 2 161,34 hectares, which is also owned by Caledonia.
“Using a gold price of US$2 548/oz, the Project has a projected capital cost of US$584 million and a peak funding requirement of US$484 million. The post-tax ungeared internal rate of return is 32,5%, with an all-in sustaining cost of US$1 061/oz and a payback period of just 1,7 years,” Caledonia said.
“Although capital costs have increased compared to the PEA (Preliminary Economic Analysis) and the IA (initial assessment) by 45% driven by general cost escalation and exchange rate impact (US$35 million), scope refinement and market-related adjustments (US$86 million), and revisions to project services and contingency (US$59 million), the project remains attractive with robust margins and strong cash flow potential.”
Caledonia revealed a strategic funding strategy to raise the capex needed to fully develop Bilboes.
“Caledonia, advised by Cutfield Freeman & Co Ltd, expects most of the financing to be in the form of non-recourse senior debt, internal equity contributions from Blanket Mine and flexible instruments such as royalties, streams and mezzanine funding which may include the issue of convertible bonds,” Caledonia said.
“The company aims to minimise equity dilution and maintain its current quarterly dividend of 14 cents per share, subject to prevailing conditions. Management anticipates that a complete funding package will be in place by late 2026 or early 2027.
“However, the company has already embarked on preparations to provide sufficient liquidity to allow for the early procurement of long lead-time items in the second half of 2026, thereby accelerating the project development timetable.”
Caledonia said that it expects to start “first production” at the Bilboes Mine in late 2028.
The life of mine for Bilboes is expected at nearly 11 years.